Banks Disparage Gold Ownership

David Levenstein: As we enter the New Year and amid a list of bearish reports on gold, issued by most of the major Western banks, the flow of the yellow metal from the West to the East continues while Western banks are found guilty of a multitude of criminal activities including cases related to the sub-prime crisis, credit default swaps, mortgages, tax evasion, market rigging and insider trading, just to mention a few.

While main stream media applaud the latest results of some of the major banks in the world, they hardly mention anything about how some of these banks have been involved in multiple cases of litigation. More incredible is how most analysts refer to these banks as well run institutions. And, despite being fined billions of US dollars, not a single person has been prosecuted. Can you imagine what would happen if an individual defrauded a bank? To make this more unbelievable, the culprits are not any small offshore bank, but include some of the worlds’ largest banks such as HSBC, JP Morgan Chase, Deutsche and Barclays.

Perhaps the biggest transgressor is JP Morgan Chase (JPM), the largest bank in the US and the sixth largest bank in the world with $2.39 trillion in assets. Only last week, JPM agreed to pay $1.7 billion to resolve a Justice Department investigation into its role in Bernard Madoff’s multibillion-dollar Ponzi scheme.

The giant Wall Street bank, which served as Madoff’s primary banker, acknowledged that it failed to alert authorities to suspicious activity in Madoff’s accounts as required under federal law.

JPMorgan admitted violating two U.S. laws: failing to maintain effective anti-money laundering program and failing to file a suspicious activity report.

The agreement comes five years after Madoff’s arrest rocked Wall Street and investors worldwide. He acknowledged stealing billions of dollars from investors, falsely claiming for decades that he used their money to make enormous gains in the financial markets. Instead, he used new investor money to make payments to earlier investors while making very few trades.

But, if you think this is the only transgression JP Morgan has made, think again. While, JPM brought in nearly $24 billion in revenue last quarter, it reported a net loss of $400 million, widely attributed to legal fees. The company’s settlements since January add up to at least $20 billion!

Last year, in an agreement settling many U.S. claims over its sale of troubled mortgages, JPMorgan Chase agreed to pay a record $13 billion, in a deal announced by the Justice Department. The plan includes a $4 billion payment for consumer relief, along with a payment to investors of more than $6 billion and a large fine.

In addition to this JPM has agreed to pay $4.5 billion to investors — including 21 major institutions — for the faulty securities.

In September and October last year the bank agreed to pay $1 billion to end investigations into the botched financial transactions of traders in London that cost the company more than $6 billion. In agreements with regulators totalling $1 billion and the largest bank in the US settled four civil investigations into its “London Whale” trading scandal and two more into the wrongful billing of credit-card customers.